Correlation Between Daejung Chemicals and DoubleU Games
Can any of the company-specific risk be diversified away by investing in both Daejung Chemicals and DoubleU Games at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Daejung Chemicals and DoubleU Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daejung Chemicals Metals and DoubleU Games Co, you can compare the effects of market volatilities on Daejung Chemicals and DoubleU Games and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Daejung Chemicals with a short position of DoubleU Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daejung Chemicals and DoubleU Games.
Diversification Opportunities for Daejung Chemicals and DoubleU Games
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Daejung and DoubleU is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Daejung Chemicals Metals and DoubleU Games Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DoubleU Games and Daejung Chemicals is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Daejung Chemicals Metals are associated (or correlated) with DoubleU Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DoubleU Games has no effect on the direction of Daejung Chemicals i.e., Daejung Chemicals and DoubleU Games go up and down completely randomly.
Pair Corralation between Daejung Chemicals and DoubleU Games
Assuming the 90 days trading horizon Daejung Chemicals Metals is expected to under-perform the DoubleU Games. But the stock apears to be less risky and, when comparing its historical volatility, Daejung Chemicals Metals is 1.37 times less risky than DoubleU Games. The stock trades about -0.06 of its potential returns per unit of risk. The DoubleU Games Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,245,000 in DoubleU Games Co on October 16, 2024 and sell it today you would earn a total of 720,000 from holding DoubleU Games Co or generate 16.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daejung Chemicals Metals vs. DoubleU Games Co
Performance |
| Timeline |
| Daejung Chemicals Metals |
| DoubleU Games |
Daejung Chemicals and DoubleU Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daejung Chemicals and DoubleU Games
The main advantage of trading using opposite Daejung Chemicals and DoubleU Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daejung Chemicals position performs unexpectedly, DoubleU Games can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in DoubleU Games will offset losses from the drop in DoubleU Games' long position.| Daejung Chemicals vs. Hwangkum Steel Technology | Daejung Chemicals vs. Aprogen Healthcare Games | Daejung Chemicals vs. FNSTech Co | Daejung Chemicals vs. KMH Hitech Co |
| DoubleU Games vs. Daejung Chemicals Metals | DoubleU Games vs. INNOX Advanced Materials | DoubleU Games vs. Hyundai Engineering Plastics | DoubleU Games vs. LS Materials |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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